DRAFT OF SOVIET LAW OUTLINES SWEEPING ECONOMIC REFORMS

MOSCOW -- The Soviet Union on Saturday published a draft law outlining sweeping changes in the structure of the economy, including easing the rigid central state control of businesses, introducing a profit motive and giving workers a chance to elect managers and bosses.

Regulations for joint ventures with foreign companies, including those of the West, were also set out.

The law embodies virtually all major reforms called for by Soviet leader Mikhail Gorbachev in his attempt to turn around the slumbering and archaic economy and instill a sense of pride in the work place to improve quality and output.

It also fits in with Gorbachev's promise of more democracy in the country through election reforms that call for secret ballots and multi-candidate elections where voters will exercise a genuine choice.

The draft regulations were published to allow debate prior to the next sitting of the country's parliament later this year where the law is expected to be adopted.

The essence of the law is to make factories and other state-controlled enterprises more efficient and independent by giving them freedom to innovate and cutting away the safety net of hefty state subsidies for non-profitable factories.

The concepts of profit and loss and strict cost accounting are to be the basis for industry and not state subsidies.

Adherence to strict dictates and quotas of central planning will be eased.

Under the new law, managers will be elected directly by workers on the shop floor for terms of up to three years and businesses will be permitted to fire workers whose performances are substandard.

Most managers and factory heads are currently appointed by Communist Party officials.

Individual businesses will be free to set their own pay scales based on production and free to reinvest and distribute profits among workers.

Previously, profits were often dumped into a state fund which was used to keep poorly managed concerns afloat.

Such ill-managed concerns will in the future be unable to meet basic costs and payrolls and could be allowed to go bankrupt.

"The draft law says that the work collectives will be full-fledged masters of their enterprises and will independently decide practically all matters related to production.

"Each enterprise will independently use profit, creating through it the fund for the pay for work, social development, development of production, science and technology," the Tass news agency said.